Two months ago, US telehealth services company MDLive announced it would be expanding its virtual primary care platform. For the first time, it will offer support tools to manage patients with chronic conditions. This will start with hypertension support tools, before expanding through 2023 to include other chronic conditions.
MDLive says the new chronic care management tools will support millions of patients who currently subscribe to its services via employer health benefits schemes in the US. It also claims that it is the first virtual primary care programme to offer a consistent stream of insights between the primary care physician, health provider and patient. This, it claims, will result in better care co-ordination.
Although it is a leading US telehealth vendor with a track record in low acuity services, MDLive is a latecomer to chronic care management. Teladoc, which is heavily invested in chronic care management (not least through its multi-billion dollar Livongo acquisition in 2020), is the market leader. MDLive will need to play catch up, although it is well placed to grow its revenues per chronic life managed. This is where its focus will now be trained.
The Signify View
MDLive’s move into chronic care management is a logical next step for a company which has played in low acuity services for much of its existence. Last November, the company claimed that its virtual primary care platform registered a 300% year-on-year surge in consultation numbers. While this was impressive, even more significantly MDLive says 68% of the patients who used its platforms for a wellness visit over this period identified with at least one chronic condition. This results in a massive potential captive market for MDLive, which it can now start to serve with its new suite of chronic care management tools.
MDLive’s relatively recent corporate history also informs its current approach to portfolio and services. It was acquired by Evernorth, the healthcare services subsidiary of insurance firm Cigna, in February 2021. Evernorth essentially co-ordinates healthcare services for employers and government workers, managing patients’ conditions cost-effectively and proactively. Acquiring MDLive gave Evernorth an integrated in-house virtual care service covering urgent care, dermatology, therapy and psychiatry via a network of certified clinicians that it could offer to its payer customers covered by Cigna policies. While relatively modest cash-wise, the deal was a milestone for MDLive. For the first time, leveraging its parent company’s model, it was able to offer services more cost-effectively and proactively. This was a significant departure from its traditional approach of simply reacting to care needs, and the first real sign that it was aligning itself with the tenets of value-based care (VBC).
Barren Landscape
As we have stated, MDLive’s decision to expand into chronic care management is sound, given that around two-thirds of the patients using its wellness platform identify with at least one chronic condition.
Virtual care in the US is, however, almost saturated (this is a problem for MDLive, which only operates in the US). Nearly all payers and employers in the country offer some kind of virtual care service in 2023. Indeed, most companies take a more proactive approach to managing people, patients and chronic conditions than ever, broadly in keeping with VBC.
Because of the above, opportunities to prise customers from their existing virtual care provider contracts are limited, and there are very few new customers in the market. As such, it is verging on the impossible for MDLive to win meaningful share from the likes of Teladoc or AmWell in the current environment.
The question for MDLive therefore becomes how to maximise the revenue potential of each patient interaction. Every one of the 68% of patients on MDLive’s platforms with a chronic condition represents a new revenue opportunity.
VBC reimbursement models, where payers are incentivised to better manage their services, are integral to capturing this opportunity. Medicare Advantage contracts, where providers offer everyone on Medicare Advantage an Annual Wellness Visit (AWV) screening service, are promising for MDLive, and reimbursement structures are already in place to support this.
RPM and the Reimbursement Opportunity
Remote patient monitoring (RPM) reimbursement models are another route to fresh revenue streams for MDLive. As the company’s chronic care management tools are rolled out this year, physicians will track personalised care and condition management plans through connected devices (for example blood pressure cuffs and blood glucose monitors). Similar to the VBC reimbursement models referred to above, RPM also has reimbursement codes in place (see graph below), and many RPM vendors are already geared up to support them. This is a straightforward way for MDLive to generate new revenue streams.
Another RPM trend could also play into MDLive’s hands. Pharmaceutical companies are moving into the tracking of medication use, adherence and efficacy. The combination of medication and monitoring devices and patient-reported outcomes offers synergies, not just in the virtual care offering but also in the development of the pharmaceutical/medication elements of RPM.
Late to the Party
Although it is an established US telehealth vendor, MDLive has long followed in the slipstreams of Teladoc and AmWell. The origins of all three companies, however, are very similar, initially selling only low acuity services, mainly to insurance companies or employers.
Teladoc and AmWell then accelerated swiftly from that point, decoupling their platform from their service and selling it independently, and scaling the acuity ladder. Teladoc bought virtual care firm InTouch Health in 2020, while AmWell bought Avizia, the acute care telehealth specialist in 2018.
MDLive, by contrast, has been much more circumspect. It has spent most of its existence in low acuity care, focused on payer and employer markets. It did eventually follow its rivals’ leads by selling its platform, but the company has not scaled anywhere near as largely as Teladoc and AmWell. Even the Evernorth acquisition has had limited impact on scale.
Teladoc was one of the first telehealth vendors to recognise the potential of virtual chronic care management. It bet big on the opportunity, paying a multi-billion dollar Covid premium for Livongo, a leader in platforms and services for managing patients with chronic conditions. Positively, Teladoc gained an impressive 600,000 chronic lives managed from the deal. Less positively, it also inherited a mountain of debt. AmWell has also started to make noises in the chronic care management direction, although to a lesser extent than Teladoc. All three companies (plus other telehealth players) rode the Covid telehealth boom, when revenues soared. Teladoc and AmWell have seen revenue growth decelerate since (which we describe in detail in this Insight), while MDLive’s 300% claimed increase in consultations suggest its fared slightly better post-Covid.
MDLive may be latecomer to chronic care management. But what it lacks in scale compared to its rivals is compensated by a more conservative and measured approach to growth, which serves it well in the post-Covid era.
End-to-End Ambitions
MDLive’s decision to expand its telehealth portfolio into chronic care management is part of its ambition to offer end-to-end virtual care for its customers. By integrating MDLive’s virtual care platform, Evernorth believes it can build a connected care delivery model that can more quickly identify patients’ needs, more easily facilitate specialist or behavioural health referrals, and broadly reduce costs.
Seen in this light, another interesting parallel that can be drawn is with UnitedHealth Group subsidiary Optum, which offers healthcare provision (including RPM via Vivify), pharmacy benefit management and data analytics services. In both instances, the use of new technologies to manage chronic conditions should lead to better patient outcomes and lower insurance pay-out costs for the parent company.
If MDLive is to really capitalise on chronic care management, it will need to find ways to extract more revenue from each life managed. Leveraging reimbursement models and supporting VBC will be key to achieving this.